Indicate your choice by writing in the Answers column T for a true answer or F for a false answer.. A business transaction usually requires an exchange between the business 11.. Section
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Date _
SCORING RECORD
Section Total Possible Deductions Student Score
Section A
Directions: Each of the following statements is true or false Indicate your choice by writing in the Answers
column T for a true answer or F for a false answer (2 points for each correct answer)
For Answers Scoring
1 The purpose of accounting is to provide management information about a
2 The Securities and Exchange Commission (SEC) has the power to require
3 There are only two types of business ownership: partnerships and sole
4 A business that produces a product to sell to retailers is called a
6 As explained in the text, there are six major steps in the accounting process T _
8 A business transaction usually requires an exchange between the business
11 When analyzing the effects of every business transaction, the accountant
12 The concept that income determination can be made on a periodic basis is
Trang 2Section B
Directions: Complete each of the following statements by writing in the Answers column the letter of the
word or words that correctly completes each statement or answers the question (3 points each)
For Answers Scoring
1 Users of accounting information may include (A) owners; (B) managers;
2 Looking at events that have taken place and thinking about how they affect
the business is (A) analyzing; (B) recording; (C) classifying, (D) summarizing; (E) reporting A _ 3 The Sarbanes-Oxley Act (SOX) was passed by Congress to (A) keep all managers from doing something illegal; (B) require that all companies send reports to the government; (C) improve reporting by public companies; (D) give the Securities and Exchange Commission (SEC) legal rights; (E) allow public accounting firms to provide management advising services C _ 4 The amount by which the business assets exceed the business liabilities is (A) net income; (B) owner’s equity; (C) revenue; (D) A & C; (E) B & C B _ 5 Rod paid $1,000 for the month’s rent This transaction would (A) increase an asset and decrease an asset; (B) increase an asset and increase a liability; (C) decrease an asset and increase owner’s equity; (D) decrease an asset and decrease owner’s equity; (E) increase two asset accounts D _ 6 Ken paid $400 cash for services he had received earlier in the month This
transaction would (A) increase an asset and decrease an asset; (B) increase
an asset and decrease a liability; (C) increase an asset and increase owner’s
equity; (D) decrease a liability and increase owner’s equity; (E) none of
these E _ 7 Owner’s equity is not affected by (A) investments; (B) withdrawals by the
8 Mr T invested $20,000 in cash into his business This transaction would
(A) increase assets and decrease owner’s equity; (B) decrease assets and
increase owner’s equity; (C) decrease assets and decrease liabilities;
9 Which of the following accounts is a liability? (A) Accounts Payable;
10 Which is an example of a merchandising business? (A) a car manufacturer;
Trang 3Section C
Directions: Match the letter corresponding to one of the basic elements of accounting to each of the
accounts below A = Asset, L = Liability, and O = Owner’s Equity (2 points for each correct answer)
Section D
Rory Alia has started her own business During the first month, the following transactions occurred
(a) She invested $8,000 cash in the business
(b) Paid $600 for insurance for the next 12 months
(c) Purchased a computer on account for $1,200
(d) Received $500 cash from a client for professional services rendered
(e) Paid $200 office rent for the month
(f) Paid $100 on account for the computer purchased in (c) above
Directions: Using the lines provided below, show the effect of each transaction on the basic elements of the
accounting equation: assets, liabilities, and owner’s equity Compute the new amounts for each element
after each transaction to show that the accounting equation has remained balanced (30 points total)
ASSETS LIABILITIES OWNER’S EQUITY
(b) – 600 =
+ 600